Goods often sell for different prices in different countries. Suppose the inverse demand curves in two countries
Question:
Goods often sell for different prices in different countries. Suppose the inverse demand curves in two countries are \(p_{1}=40-3 Q_{1}\) and \(p_{2}=90-2 Q_{2}\), and a monopoly produces at constant marginal cost, \(M C=10\). What is the profit maximizing price and quantity in each country? Will the monopolist necessarily be able to sell its output at those prices if shipping costs between the two countries are low? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: